Should edX prioritize expanding its free course offerings to increase user acquisition or focus on premium content to boost revenue?

Introduction

The trade-off between expanding free course offerings to increase user acquisition or focusing on premium content to boost revenue is a critical decision for edX's growth strategy. This scenario touches on the core of edX's business model and its mission to provide accessible education. I'll analyze this trade-off by examining the product ecosystem, potential impacts, and key metrics, then design an experiment to inform our decision.

Step 1

Clarifying Questions (3 minutes)

• Based on edX's current user base, I'm thinking we might have a mix of casual learners and those seeking professional development. Could you share more about our primary user segments and their learning goals?

Why it matters: Helps tailor our strategy to meet user needs Expected answer: Mix of students, professionals, and lifelong learners Impact on approach: Would influence content strategy and pricing models

• Considering our revenue model, I assume we have a freemium structure. What's the current conversion rate from free to paid users, and how does it compare to industry benchmarks?

Why it matters: Indicates the effectiveness of our current funnel Expected answer: 5-10% conversion rate, slightly below industry average Impact on approach: Low conversion might suggest focusing on premium content quality

• Looking at our technical infrastructure, how scalable is our platform for handling a potential influx of free users?

Why it matters: Ensures we can support growth without compromising quality Expected answer: Current capacity can handle 2x growth Impact on approach: May influence the pace of free course expansion

• Regarding our content creation process, what's our current capacity for developing new courses, both free and premium?

Why it matters: Determines our ability to execute on either strategy Expected answer: Limited resources, can create 10-15 new courses per quarter Impact on approach: Might necessitate prioritizing either free or premium content

• Considering market trends, how has demand for online education changed in the past year, particularly for certified courses?

Why it matters: Helps align our strategy with market dynamics Expected answer: Increased demand for both free and certified courses Impact on approach: Could suggest a balanced approach to serve both markets